China’s EV industry opened April 2026 with a clear message: the next phase of competition is no longer just about selling more cars. It is about software-defined vehicles, AI, safety systems, supply-chain control, and lifecycle regulation. Huawei reported RMB 880.94 billion in 2025 revenue, with its intelligent automotive solutions business surging 72.1% year on year to RMB 45.02 billion. XPeng officially renamed itself XPeng Group to reflect a broader “physical AI” strategy, while China’s new power battery recycling rules took effect on April 1, tightening oversight across the battery value chain. At the same time, suppliers such as Asia-Pacific Shares (APG) and automakers like Xiaomi are showing how braking electronics and advanced driver assistance are becoming critical battlegrounds.
Huawei’s Auto Business Is Growing Faster Than the Rest
Huawei’s 2025 annual report underlined how quickly its automotive ambitions are scaling. While the company’s overall business remained large and diversified, the smart car segment was the clear standout.
Huawei 2025 key figures
| Metric | 2025 | YoY Change |
|---|---|---|
| Total revenue | RMB 880.941 billion | +2.19% |
| Net profit | RMB 68.036 billion | +8.73% |
| R&D spending | RMB 192.3 billion | — |
| R&D as % of revenue | 21.8% | — |
| R&D staff | 114,000 | 53.7% of total workforce |
| Valid authorized patents | 165,000 | — |
| Intelligent automotive solutions revenue | RMB 45.018 billion | +72.1% |
Huawei’s automotive business is still smaller than its ICT infrastructure and consumer segments, but its growth rate matters more than its current size. A 72.1% jump suggests Chinese automakers are continuing to adopt Huawei’s full-stack smart driving, cockpit, and vehicle-domain solutions at scale.
The company also used the report to preview its next technology wave. Huawei’s Qiankun intelligent automotive solutions unit plans to hold a technology event on April 23, where it is expected to detail:
- ADS 5 advanced driver assistance system
- HarmonyOS Cockpit 6
- Next-generation XMC digital chassis engine
This matters because the Chinese EV market is moving toward integrated software-hardware architectures. Smart driving, cockpit intelligence, and chassis control are increasingly being developed as one system rather than isolated modules. Huawei is positioning itself at the center of that transition.
XPeng Becomes XPeng Group as It Expands Beyond EVs
If Huawei is broadening its automotive technology platform, XPeng is broadening its corporate identity.
On April 1, the company officially changed its Chinese name from “XPeng Motors” to “XPeng Group,” while keeping its English name XPeng Inc. and Hong Kong stock code 9868.HK unchanged. The change does not affect shareholders or existing shareholdings, but strategically it is significant.
XPeng says the new name reflects its evolution from a smart EV maker into a “physical AI technology group.” In practical terms, that means a portfolio extending well beyond passenger cars.
XPeng’s new strategic pillars
- Smart electric vehicles
- Flying cars
- Robotaxi
- Humanoid robots
- In-house Turing AI chips
The company has also reorganized internally:
- Autonomous driving and smart cockpit teams have been merged into a general intelligence center
- A dedicated Robotaxi business unit has been created
Management framed 2026 as the first year of large-scale commercialization for physical AI products. Its roadmap for the year includes:
- Mass production of the “Land Aircraft Carrier” flying car
- Pilot Robotaxi passenger operations in the second half of 2026
- Advancing mass production of the IRON humanoid robot by year-end
- Increasing physical AI-related R&D spending to RMB 7 billion in 2026
This is a bold expansion plan, and it carries execution risk. But it also reflects a broader reality in China’s EV sector: leading brands increasingly see the car as just one endpoint in a larger AI-enabled mobility ecosystem.
New Battery Recycling Rules Tighten China’s EV Lifecycle Control
One of the most important policy changes in this news cycle may prove less flashy than Huawei or XPeng, but arguably more consequential for the long term.
China’s new interim rules on the recycling and comprehensive utilization of retired power batteries for new energy vehicles officially took effect on April 1. The regulations were jointly issued by six government bodies, including the Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Ecology and Environment.
The policy pushes China into a more tightly regulated, full-chain battery management model.
What the new battery recycling rules do
- Require end-of-life NEVs to be turned in with their battery packs attached
- Classify vehicles missing their battery pack as incomplete scrappage cases
- Launch a nationwide battery traceability platform
- Assign each battery a unique digital identity code
- Track the battery across production, sales, service, maintenance, and recycling
- Reinforce extended producer responsibility for automakers and battery makers
- Require compliant recycling service networks in sales regions
- Ban retired EV batteries from being reused directly or after processing in e-bikes and similar fields
- Tighten environmental and safety access standards for recycling firms
- Introduce penalties including orders for correction, warnings, and fines
For the Chinese EV market, this is a major structural upgrade. It reduces leakage into informal recycling channels, improves material recovery, and supports a closed-loop battery supply chain. It also favors large automakers and battery companies with the scale, logistics, and technical capability to build compliant recycling systems.
In other words, battery recycling is no longer a side issue. It is becoming part of industrial policy, ESG performance, and supply security all at once.
Xiaomi Is Expanding the Definition of EV Safety
Xiaomi’s latest update on the new-generation SU7 shows how quickly active safety expectations are evolving in China’s EV market.
According to the company, the updated SU7’s AEB system expands the range of detectable objects and improves response in more extreme scenarios.
New Xiaomi SU7 AEB capabilities
- Forward AEB operating speed: 1-135 km/h
- Reverse AEB operating speed: 1-30 km/h
- Recognition of common targets such as vehicles, pedestrians, and two-wheelers
- Recognition at 20-135 km/h of road barriers and traffic drums
- New recognition capability for certain irregular obstacles such as:
- cardboard boxes
- stones
- tires
- Coordinated operation with:
- AES emergency steering assist
- MAI mis-acceleration inhibition assist
The significance here is not just feature expansion. It is the shift toward edge-case safety performance as a key consumer differentiator. Chinese EV buyers are becoming more sophisticated about ADAS claims, and regulators, media, and users are paying closer attention to what systems can actually detect and handle in real-world conditions.
Xiaomi was also careful to emphasize a point the entire industry should repeat more often: assisted driving is not autonomous driving, and drivers must remain attentive.
APG Shows How Suppliers Are Benefiting From EV Electrification
The transition to intelligent EVs is not only boosting headline brands. It is also reshaping the supplier landscape, especially in braking, chassis, and vehicle control systems.
Asia-Pacific Shares, a long-established Chinese braking supplier, posted a strong 2025 with revenue of RMB 5.607 billion, up 31.61%, and net profit attributable to shareholders of RMB 490 million, up 130.18%.
The deeper story is its mix shift toward automotive electronics.
APG 2025 performance snapshot
| Metric | 2025 | YoY Change |
|---|---|---|
| Revenue | RMB 5.607 billion | +31.61% |
| Net profit | RMB 490 million | +130.18% |
| Operating cash flow | RMB 1.349 billion | +71.16% |
| Gross margin | 20.83% | +2.42 pts |
| R&D spending | RMB 342 million | 6.11% of revenue |
| Valid patents | 694 | — |
| Invention patents | 153 | — |
Business mix change
| Segment | Revenue | YoY Change | Share of Revenue |
|---|---|---|---|
| Basic braking systems | RMB 3.819 billion | +22.82% | 68.11% |
| Electronic control systems | RMB 1.626 billion | +59.54% | 29.00% |
APG said products such as IBS intelligent braking systems and ESC electronic stability control systems are seeing rising orders from both Chinese and international automakers. During the reporting period, it launched 244 new projects, including 111 in automotive electronic control systems, and started mass production on 160 projects for customers such as Changan, Geely, FAW Hongqi, and Leapmotor.
Technically, the company is moving up the value chain from conventional braking hardware toward brake-by-wire and integrated chassis control.
APG’s technology roadmap includes
- IBS (One-Box) intelligent braking systems
- ESC electronic stability systems
- ASIL-D functional safety capability
- EMB electronic mechanical braking development
- Corner module chassis fusion control systems
- Integration of steering, in-wheel motors, braking, and active suspension algorithms
The company is also internationalizing, with a Germany R&D center and a planned Morocco production base scheduled for 2027, designed for annual brake caliper assembly output of 2.65 million units.
This is a useful reminder that China’s EV competitiveness increasingly depends on domestic Tier 1 suppliers being able to deliver not just low-cost parts, but software-rich safety and chassis systems.
BYD’s R&D Scale Shows the Benchmark Everyone Else Is Chasing
Although BYD was not the central story of this news cycle, its latest disclosures help frame the competitive backdrop. The company reported 2025 R&D spending of RMB 63.4 billion, ranking first among A-share listed companies for the second consecutive year.
Its broader scale remains formidable:
- 4.6 million new energy vehicles sold in 2025
- 135 GWh cumulative energy storage system shipments
- RMB 53.3 billion in domestic tax payments
- 120,000 R&D personnel
- 71,094 cumulative patent applications
- ESG rating upgraded to AA by MSCI
BYD’s numbers matter because they define the upper bound of China’s EV industrial model: massive scale, vertical integration, battery and energy ecosystem reach, and sustained reinvestment in core technology.
For rivals, the implication is straightforward. Competing in China’s EV market now requires much more than a compelling vehicle launch. It demands balance-sheet strength, software capability, supply-chain resilience, and increasingly, a credible sustainability story.
Why This Matters Globally
Taken together, these developments show that China’s EV industry is entering a more mature and strategically important phase.
The global implications are significant
- Smart vehicle competition is intensifying: Huawei’s 72.1% growth in automotive solutions shows that software and electronics suppliers are becoming as important as automakers themselves.
- EV companies are turning into AI companies: XPeng’s rebrand highlights how Chinese carmakers are trying to capture value in robotics, Robotaxi, and embodied AI.
- Battery regulation is becoming stricter: China’s recycling rules could become a reference point for other major EV markets trying to secure battery materials and enforce traceability.
- Safety systems are becoming a premium battleground: Xiaomi’s expanded AEB functions reflect a broader trend toward more advanced perception and edge-case handling.
- Suppliers are moving up the stack: APG’s rise in electronic braking systems shows how local parts makers are benefiting from electrification and software-defined vehicle architectures.
For overseas automakers and suppliers, the message is clear: China is no longer just the biggest EV market. It is also one of the fastest-moving laboratories for automotive AI, battery governance, and intelligent chassis technology.
What Comes Next
The next few months should offer a clearer view of who can convert ambition into scale.
Huawei’s April 23 tech event will be closely watched for ADS 5, HarmonyOS Cockpit 6, and digital chassis updates. XPeng now has to prove that its “physical AI” strategy can move from branding to commercial execution. Battery recycling players will need to adapt quickly to stricter traceability and compliance requirements. And as Xiaomi, BYD, and suppliers like APG continue to push safety and control-system innovation, the competitive bar in China’s EV market will only rise.
The industry’s center of gravity is shifting from electrification alone to intelligence, integration, and lifecycle control. That is not just China’s next EV chapter. It may become the template for the global auto industry’s future as well.
